a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value
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Good
has tangible attributes that a consumer's five senses can perceive (ex: iPad); it may also have intangible attributes consisting of its delivery or warranties and embody more abstract concepts, such as becoming healthier or wealthier
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Nondurable good
an item consumed in one or a few uses, such as food products and fuel
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Durable good
one that usually lasts over many uses, such as appliances, cars, and mobile phones
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Idea
a thought that leads to a product or action, such as a concept for a new invention or getting people to vote
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Consumer products
products purchased by the ultimate consumer
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Convenience products
items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort
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Shopping products
items for which the consumer compares several alternatives on criteria such as price, quality or style
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Specialty products
items that the consumer makes a special effort to search out and buy
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Unsought products
items that the consumer does not know about or knows about but does not initially want
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Business products
products organizations buy that assist in providing other products for resale
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Derived demand
sales of business products frequently result (or are derived) from the sale of consumer products
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Components
items that become part of the final product (ex: raw materials or parts)
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Support products
items used to assist in producing other goods and services
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Product item
a specific product that has a unique brand, size, or price
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Stock keeping unit (SKU)
a unique identification number that defines an item for ordering or inventory purposes
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Product line
a group of product or service items that are closely related because they satisfy a class of needs, a used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range
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Product mix
consists of all of the product lines offered by an organization
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Continuous innovation
product that requires no new learning by consumers
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Dynamically continuous innovation
product that disrupts consumer's normal routine but does not require totally new learning
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Discontinuous innovation
product that requires new learning and consumption patterns by consumers
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Protocol
a statement that, before product development begins, identifies 1) a well-defined target market, 2) specific customers' needs, wants and preferences, and 3) what the product will be and do to satisfy consumers
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New-Product Process
the seven stages an organization goes through to identify business opportunities and convert them into salable products or services
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New-product strategy development
defines the role for a new product in terms of the firm's overall objectives
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Idea generation
involves developing a pool of concepts to serve as candidates for new products, building upon the previous stage's results
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Open innovation
where an organization finds and executes creative new-product ideas by developing strategic relationships with outside individuals and organizations
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Crowdsourcing
involves generating insights leading to actions based on massive numbers of people's ideas
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Screening and evaluation
the stage that internally and externally evaluates new-product ideas to eliminate those that warrant no further effort
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Feasibility screen
internal approach where the firm's employees evaluate the technical feasibility of a proposed new product idea to determine whether it meets the objectives defined in the new-product strategy development stage
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Concept test
external evaluations with consumers that consist of preliminary testing of a new-product idea rather than an actual product; more useful with minor modification of existing products rather than new, innovative products
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Business analysis
specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections
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Development
the stage of the new-product process that turns the idea on paper into a prototype
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Market testing
the stage of the new-product process that involves exposing actual products to prospective customers under realistic purchase conditions to see if they will buy
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Commercialization
the stage of the new-product process that positions and launches a new product in full-scale production and sales; most expensive stage
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Parallel development
an approach where cross-functional team members who conduct the simultaneous development of both the product and the production process stay with the product from conception to production; helps speed up TtM
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Fast prototyping
a "do it, try it, fix it" approach used in software development that encourages continuing improvement even after the initial design
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Slotting fees
a payment a manufacturer makes to place a new item on a retailer's shelf; used in grocery products
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Failure fee
a penalty payment a manufacturer makes to compensate a retailer for devoting valuable shelf space to a product that failed to sell
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Product Life Cycle
describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline
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Primary demand
the desire for the product class rather than for a specific brand, since there are few competitors in the same product
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Selective demand
the preference for a specific brand
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Skimming
a pricing strategy where a company offers a high initial price to help it recover the costs of development as well as capitalize on the price insensitivity of early buyers
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Penetration pricing
a pricing strategy to discourage competitive entry where a company prices low to help build unit volume; but, must monitor costs
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Deletion
dropping the product from the company's product line
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Harvesting
when the company retains the product but reduces marketing costs
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High-learning product
products where significant consumer education is required and there is an extended introductory period
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Low-learning product
products where the sales curve begins immediately because little learning is required by the consumer, and the benefits of purchase are readily understood; the product is also easily imitated by competitors, so marketers must broaden distribution quickly
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Fashion product
products that are a style of the times; will be introduced, decline, and then return
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Fad
products that experience rapid sales on introduction and then equally rapid decline
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Product class
refers to the entire product category or industry, such as prerecorded music
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Product form
pertains to variations within the product class
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Diffusion of innovation
the way a product spreads through the population
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Product modification
involves altering one or more of a product's characteristics, such as its quality, performance, or appearance, to increase the product's value to customers and increase sales
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Market modification
a company tries to find new customers, increase a product's use among existing customers, or create new use situations
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Product repositioning
changes the place a product occupies in the mind relative to competitive products; can do this by changing one or more of the four marketing mix elements
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Trading up
involves adding value to the product (or line) through additional features or higher quality materials
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Trading down
involves reducing the number of features, quality, or price of a product
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Downsizing
reducing the package content without changing package size and maintaining or increasing package price
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Branding
using a name, phrase, design, symbols, or combination of these to identify a company's products and distinguish them from those of competitors; is a basic decision in marketing products
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Brand name
any word, device (design, sound, shape or color), or combination of these used to distinguish a seller's goods or services
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Trade name
a commercial, legal name under which a company does business
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Trademark
identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use, thereby preventing others form using it
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Brand personality
a set of human characteristics associated with a brand name; research shows that consumers assign personality traits to products (traditional, rugged, etc.) and choose brands that are consistent with their own or desired self-image
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Brand equity
the added value a brand name gives to a product beyond the functional benefits provided; provides 1) a competitive advantage and 2) consumers are willing to pay a higher price for a product with brand equity
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Brand licensing
a contractual agreement whereby one company (licensor) allows its brand name or trademark to be used with products or services offered by another company (licensee) for a royalty or fee
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Multiproduct branding
a type of branding where a company uses one name for all its products in a product class (sometimes called family branding or corporate branding)
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Multibranding
involves giving each product a distinct name
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Private branding
used when a company manufactures products but sells them under the brand name of a wholesaler or retailer
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Mixed branding
a firm markets products under its own name and that of a reseller because the segment attracted to the reseller is different from its own market
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Product line extensions
the practice of using a current brand name to enter a new market segment in its product class
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Subbranding
combines a corporate or family brand with a new brand, to distinguish a part of its product line from others
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Brand extension
the practice of using a current brand name to enter a different product class
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Co-branding
the pairing of two brand names of two manufacturers on a single product
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Packaging
any container in which a product is offered for sale and on which label information is conveyed
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Label
an integral part of the package that typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients
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Warranty
a statement indicating the liability of the manufacturer for product deficiencies
regulates the content of consumer warranties and so has strengthened consumer rights with regard to warranties
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Services
intangible activities or benefits (such as airline trips, financial advice, or automobile repair) that an organization provides to satisfy consumers' needs in exchange for money or something else of value
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Four I's of Services
intangibility, inconsistency, inseparability, and inventory
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Idle production capacity
when the service provider is available but there is no demand for the service
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Service continuum
the range of product-dominant to service-dominant offerings for a company
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Gap analysis
identification of the differences between the consumer's expectations and experience with a service offering; this type of analysis asks consumers to assess their expectations and experiences on dimensions of service quality such as reliability, tangibles, responsiveness, assurance, and empathy
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Customer contact audit
a flowchart of the points of interaction between consumer and service provider
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Seven P's of services marketing
includes the 4 P's of the marketing mix (product, price, place, and promotion), as well as people, physical environment, and process
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Off-peak pricing
consists of charging different prices during different times of the day or during different days of the week to reflect variations in demand for the service
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Internal marketing
based on the notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at consumers
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Customer experience management (CEM)
the process of managing the entire customer experience with the company
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Capacity management
integrating the service component of the marketing mix with efforts to influence consumer demand
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Advertising
any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor
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Product Advertisements
advertisements that focus on selling a good or service and which take three forms: 1) pioneering (or informational), 2) competitive (or persuasive), and 3) reminder
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Pioneering advertisements
tell people what a product is, what it can do, and where it can be found (informational)
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Competitive advertisements
promotes a specific brand's features and benefits (persuasive)
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Reminder advertisements
used to reinforce previous knowledge of a product
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Reinforcement advertisements
used to assure current users they made the right choice
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Institutional advertisements
advertisements designed to build goodwill or an image for an organization rather than promote a specific good or service
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Fear appeals
appeals that suggest to the consumer that he or she can avoid some negative experience through the purchase and use of a product or service, a change in behavior, or a reduction in the use of a product
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Sex appeals
appeals that suggest to the audience that the product will increase the attractiveness of the user
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Humorous appeals
appeals that imply either directly or subtly that the product is more fun or exciting than the competitor's offerings
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Reach
the number of different people or households exposed to an advertisement
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Rating
the percentage of households in a market that are tuned to a particular TV show or radio station
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